Fears over rising unemployment haven’t stopped Australians rushing to the shops as COVID-19 restrictions were eased, with biggest spend-up in history recorded.
Australian Bureau of Statistics preliminary retail turnover figures for May surged 16.3 per cent, the largest rise in the 38 years of the survey.
It follows the largest fall ever of 17.7 per cent in April.
Westpac senior economist Andrew Hanlan said this “wild ride” still leaves sales some 0.4 per cent below their pre-COVID level, and he expects the outlook to remain weak.
“Weak income growth and fragile confidence will continue to weigh on the outlook in our view,” Mr Hanlan said in a note to clients.
The data came as the Fair Work Commission announced a national minimum wage increase of 1.7 per cent, or $13 per week, to be phased in from July 1.
It compares with a three per cent increase for the 2019/20 year, and was well below the four per cent unions were pursuing.
“This is a very modest increase and it is disappointing that several awards will not see any increase until November or February,” ACTU secretary Sally McManus said a statement.
Australian Chamber of Commerce and Industry CEO James Pearson was equally annoyed, but from an opposing position, saying the “dangerous misstep” will cost businesses more than $1.4 billion.
“Putting up the price of jobs … is nothing short of an assault on people running small businesses,” Mr Pearson said in a statement.
Unemployment has soared to its highest level in nearly two decades, and there are signs of worse to come as the pandemic takes its toll.
The jobless rate spiked to 7.1 per cent in May as a further 227,700 people lost their job, on top of nearly 600,000 in April.
“The numbers are going to get worse before they get better,” Treasurer Josh Frydenberg said.
Treasury expects the unemployment rate could hit eight per cent by September.
Market economists think it could go even higher, particularly as COVID-19 support measures like the JobKeeper wage subsidy are wound back.
“The idea that you can just withdraw all that support at one point in time … it is going to have a real impact,” Labor leader Anthony Albanese said.
Treasury is in the process of reviewing the JobKeeper and enhanced Job Seeker programs, with the treasurer expected to announce their findings on July 23.
Meanwhile, Mr Frydenberg has joined forces with other countries to ensure Australia has the right policies to make a strong and sustainable recovery from the coronavirus pandemic.
The treasurer has hosted a call with finance ministers from Canada, New Zealand, the UK and the US – the so-called Five Eyes nations – the first of what will be a regular catch-up.
“In addition to the many multilateral and bilateral discussions we are engaged in, this grouping provides a welcome opportunity for further collaboration on key economic matters,” Mr Frydenberg said.